Early last week I made Inca One Gold my top stock pick for this month. Since then the stock has made a nice move, although on Friday it pulled back as gold also corrected on that day. Take a look at the chart.
Inca One trades as IO on the TSXV and as INCAF on the US OTC. As you can see the stock smashed through 45 cents and then 50 cents to run to 80 cents. It looks like it is likely to now consolidate in the 70 cents area for a week or two to position itself for an 80 cent breakout. That would make this a good buying zone for the next run now.
I talked about this company and stock in more detail last week when I noted that it produces over 25,000 ounces of gold a year through two milling operations while having a market cap of less than half what most junior mining stocks get to in a metals bull market. It’s current price to sales ratio is currently at 0.44 according to Yahoo Finance so the stock price is still trading at a nice valuation discount.
One thing I did not mention is a big innovative move that the company is making. It is planning to launch the online sell of its own coins – coins itself is mining and will even sell at a discount to Inca One Shareholders. According to the company’s press release:
“We are incredibly pleased to offer a convenient, secure and vertically integrated alternative for customers wishing to purchase precious metals,” stated Edward Kelly, President and CEO of Inca One. “This new online service is another milestone for Inca One as we join a limited few precious metal producing peers. We will be offering bullion from Peruvian small-scale miners who have had their ore processed at one of our gold-ore processing facilities.”
“Sales from the online bullion store are expected to provide increased margins to the Company from direct sales but, most importantly, will offer an intrinsic value through enhanced marketing and promotional opportunities. As an additional benefit to shareholders, it is the Company’s intention to make the gold coins available to Inca One shareholders at a preferred rate. Furthermore, additional value will translate through to the Peruvian small-scale miners and solidify Inca One as the processor of choice, providing the best service and experience, whilst minimizing wealth extraction from the Peruvian economy.”
“To be among the first to be notified with updates about our new online bullion store please click on this link, Inca One Bullion Store, and sign up for future updates.”
I have never seen a small mining company do this before and it is a super smart move.
Disclosure: Mike Swanson owns shares of Inca One Gold. Because it is a small cap stock with a market cap of less than $100 million he has put himself in a trading blackout on the stock and will not buy or sell a share of it for at least 30-days from the date of this post.